Ford to retire Falcon when Australia plant closes in 2016

Ford Motor Co. will shed 1,200 jobs when it ends auto manufacturing in Australia in 2016, but that's not the only casualty of Ford's pending exit.

The Dearborn automaker also plans to retire the Falcon, a vehicle that for decades has been exclusively produced in Australia and during its recent generations has become the envy of some American fans of rear-wheel drive cars.

"The Falcon name is inextricably linked to Australia and being produced here," Bob Graziano, president and CEO of Ford Australia, told journalists in Australia, according to The Sydney Morning Herald. "We will retire that name when we retire that vehicle (in 2016)."

Sales of Ford vehicles in Australia have fallen and the automaker says it has lost about $581 million in Australia during the past five years, prompting the closure of an assembly plant -- which manufactures the full-size Falcon -- and engine plant in 2016.

The Falcon was sold in the U.S. until the early 1970s, but that small version of the car was not viewed favorably. For the past two decades the car -- also available in a sport utility model called the Falcon Ute -- has been made exclusively in the Australia. But sales in Australia have fallen sharply during the past decade and Ford has sold less than 20,000 Falcons annually in the past two years.

Ford plans to update the Falcon one final time in 2014.

Advertisement

CEO Alan Mulally's One Ford strategy, which calls for a consolidation of vehicle platforms and an expansion of global vehicles, has cast a longstanding shadow over the Falcon's future. The rear-wheel drive Falcon could have feasibly been built on the same platform as Ford's iconic Mustang, a rear-wheel drive car primarily sold in the U.S.

Ford recently decided to start selling the Mustang in Europe, a sign of that car's growing global presence.

The Dearborn automaker said Thursday it has not decided the fate of the Ford Territory sport utility vehicle, which is based on the Falcon platform and sold in Australia.

Other vehicles built for the Australian market include the Focus compact car, Ranger pickup truck and Kuga SUV. Ford plans to offer those vehicles in Australia for the foreseeable future, even after regional car manufacturing ends. Those imported cars will continue to come from other countries.

Manufacturing costs in other countries are minimal compared to those in Australia and are part of the reason for Ford's departure from manufacturing on the continent. Australian labor costs are about $10 more an hour than in the U.S. and Japan, according to U.S. Bureau of Labor Statistics.

And in recent years, a weakening Japanese yen prompted greater sales of import vehicles.

There's one strategy Ford did not enact: Unlike other automakers with a manufacturing presence in Australia like Toyota Motor Corp. and General Motors Co.'s Holden brand, Ford did not produce more vehicles in Australia for export when the Australian dollar was low and did not import more when the dollar was high.

Coupled with Australia-only products like the Falcon and Falcon Ute, Australia was not as integrated with the rest of Ford's operations as other markets are.